Defining Trendlines

2022年6月6日

Let's make it an objective explanation to what a trendline is. It's an average of price points. An average that is constructed in a vertical design (up or down) to visually aid the direction that price is moving.
Technical analysis needs to be Technical. That means being objective, quantitatively and mathematic, not having objective concepts results in endless (and silly) debates among lots of people, for having lots of different opinions of where the "correct" trendline is.
When the truth is that people simple are using different average points, like different moving averages. There's not exactly a "right" or "wrong" trendline, but there are those who are better fitted to a certain price action development.
The same way that some moving averages are better suited to work some types of price action, some trendlines are better for each market moment.
The best way to become good at drawing trendlines is to practice viewing the average of the price points and connecting them to see if the market recognizes them later as important levels.
Along with support and resistance (horizontal levels) trendlines (vertical levels) construct the market structure and with that knowledge coupled with chart patterns we can create wonderful trades.
Practice daily and frequently, because knowing how to draw trendlines well is next to support and resistances as one of the most important abilities of a Technical analyst and profitable Trader.